expanding access to justice class action residuals · 2018-09-10 · cy pres . is appropriate....
TRANSCRIPT
Expanding
Access to Justice through
Class Action Residuals and Other Court Awards
A TOOLKIT
Cy pres Awards create an opportunity for
attorneys and judges to support funding for legal
aid and expand access to justice for all.
Table of Contents
Message from the President of the Board of Trustees Page 1
The “Next Best Use” of Class Action and Other Residuals Page 2
Federal Class Actions: When Cy Pres is Appropriate Page 3
Practice Points and Tips Page 4
Legal Aid Supports “Justice for All” but Meets Only
a Fraction of the Need
Page 5
Examples of Class Action Residual Awards Page 6
Caselaw and Other Resources Page 7
Sample Settlement Provisions and Orders Page 9
Legal Aid Programs in California Page 11
2013-2014 Committees Page 12
February 2014
As President of the Board of the State Bar of California, I am committed to identifying ways to expand legal services to protect those most in need. Growing up the son of immigrant parents, I saw firsthand the importance of the law as a tool for fighting for the underdog and protecting people from injustice. All people, regardless of their ability to pay for it, should have access to justice. Funding for legal aid must enable California’s neediest to fairly rely on their justice system.
As stakeholders in the justice system, the Access to Justice Commission and the Legal Services Trust Fund Commission have responded to the need for legal aid funding by forming a cy pres Committee to examine ways that court awards can generate additional resources for indigent Californians. The Committee studied models in other states, examined legal precedents, and then produced this Toolkit to educate members of the Bench and Bar.
Legal professionals can use cy pres to promote access to justice for those who need it. While every case is different, it is critical for your client and for your community to insist on a cy pres distribution for any funds that would otherwise go unclaimed or undistributed. Cy pres awards allow the court to shape settlement terms to honor the intended purpose as closely as possible when further distribution is either impossible or inefficient. The doctrine is also beneficial to lawyers involved in the settlement, as it helps meet fiduciary responsibilities of lawyers to complete the distribution. Everybody benefits.
I urge you to use this toolkit to help you take advantage of opportunities to apply the principles of cy pres whenever appropriate.
We hope it will provide you with the information you need to take advantage of this important tool for improving access to justice for needy Californians, and helping to close the justice gap.
Thank you for your support.
Sincerely,
Luis J. Rodriguez, President, Board of Trustees State Bar of California
1
The “Next Best Use” of Class Action and Other Residuals
The doctrine of cy pres (from the French meaning "as near as
possible") originated in the context of trusts, where probate
courts interpreted the terms of a trust as closely as possible
to the original objective of the testator when the objective
was impossible, impracticable, or illegal to perform.
Through the use of the cy pres doctrine today, third-party
nonprofit organizations may receive grants or distributions
of unclaimed funds not just to save a testamentary gift that
would otherwise fail, but also through bankruptcy
proceedings and, importantly, in class actions.
Class action lawsuits are often brought on behalf of
consumers, low-income individuals and others with small
claims who, acting on their own, would be unable to assert a
claim effectively against large, institutional defendants.
When those class actions are successful, the benefit to each
individual may be small, although the benefit to the public
at large is significant.
When class actions result in an award for plaintiffs, often
unclaimed funds remain that for one reason or another
cannot be distributed to the designated class. This may be
because the class members cannot be located, or because
the amount due each member of the class is too small to
justify the cost of identifying, disbursing, and administering
the fund to the class. When residual funds exist, justice
often requires that these funds be put to their “next best”
use.
Cy pres awards serve legitimate public purposes, including
facilitating the resolution of complex class litigation. Legal
aid organizations and the Justice Gap Fund share the goal of
improving access to justice, and always are ideal candidates
for cy pres awards, as articulated expressly in California
Code of Civil Procedure § 384 and by federal case law.
CALIFORNIA LEGISLATION ENDORSES THE USE OF CY PRES FOR LEGAL AID.
California Code of Civil Procedure § 384
(a) It is the intent of the Legislature in
enacting this section to ensure that the
unpaid residuals in class action litigation
are distributed, to the extent possible, in
a manner designed either to further the
purposes of the underlying causes of
action, or to promote justice for all
Californians. The Legislature finds that
the use of funds collected by the State
Bar pursuant to this section for these
purposes is in the public interest, is a
proper use of the funds, and is consistent
with essential public and governmental
purposes.
(b) (After all class members are paid the
amount to which they are entitled pursuant
to judgment and a determination of the
total amount to be distributed to the
class) . . . the court shall amend the
judgment to direct the defendant to pay
the sum of the unpaid residue, plus
interest . . . to nonprofit organizations or
foundations to support projects that will
benefit the class or similarly situated
persons, or that promote the law
consistent with the objectives and
purposes of the underlying cause of
action, to child advocacy programs, or to
nonprofit organizations providing civil
legal services to the indigent. The court
shall ensure that the distribution of any
unpaid residual derived from multistate or
national cases brought under California law
shall provide substantial or commensurate
benefit to California consumers.
(c) This section shall not apply to any class
action brought against any public entity, as
defined in Section 811.2 of the Government
Code, or against any public employee, as
defined in Section 811.4 of the Government
Code. However, this section shall not be
construed to abrogate any equitable cy pres
remedy which may be available in any class
action with regard to all or part of the
residue.
(emphasis added)
2
Federal Court Class Actions: When Cy Pres is Appropriate
While designation of cy pres to legal aid is per se appropriate in California by statute, the application
of the cy pres doctrine under federal law has evolved as courts face complex and unique circumstances
in particular cases. In the course of addressing these issues, the Federal Courts have been developing
principles for determining when cy pres awards may be granted.
1. Compensation of Class Members Always Comes First, then Distribution of
the Remaining Funds Should Be Considered. Cy pres awards are only appropriate where excess funds after judgment or settlement remain and
additional cash distributions to the class is not feasible. In such circumstances, the primary
options available for disposition of the remaining funds are: 1) reversion to the defendant; 2)
escheat to the state; or, 3) a cy pres award. Courts have historically preferred the distribution of
residual funds through cy pres because reversion to the defendant is said to undermine the
deterrent effect of class actions, and escheating to the state benefits only the general public
indirectly. Cy pres awards allow courts to distribute residual funds to reasonably approximate and
benefit the interests pursued by the class action for class members.
2. Cy Pres Award Recipients Should “Reasonably Approximate” the Interests
of the Class. In determining whether proposed distributions “reasonably approximate” the interests of the class
members, courts have considered a number of factors, including: the purposes of the underlying
statutes claimed to have been violated; the nature of the injury to the class; the characteristics
and interests of the class members, including their geographical scope; the reason that
settlement funds were unclaimed; and, the closeness of the fit between the class and the cy pres
recipients.
3. Conflicts of Interest and the Appearance of Impropriety Should be Avoided
in Applying Recognized Rules. Courts should not provide for a cy pres award that would benefit any of the parties or their
counsel or that would benefit a recipient with whom such parties or counsel have a clear
affiliation or from which they would personally benefit. Such an analysis is not unduly
burdensome or challenging for the court to undertake and should address concerns of potential
abuse of the doctrine. The court can avoid any specter of judicial bias by allowing the parties or
counsel to initially propose the charities, and offer suggestions if counsel fail to propose charities
that fall within the “reasonably approximate” criteria. Of course, in California, any concerns
regarding conflict can be addressed by designating the funds to the Justice Gap Fund,
administered by the State Bar of California for the benefit of legal aid programs statewide.
4. Public Interest and Legal Services Organizations are Appropriate Cy Pres
Recipients. Making cy pres awards to public interest and legal services organizations is a recognized solution
to avoid awards that seem to “target” the settling defendants and to ensure that funds go to
worthy organizations. Federal and state courts throughout the country have long recognized that
organizations that provide access to justice for low-income, underserved, and disadvantaged
people are appropriate beneficiaries of cy pres distributions from class action settlements or
judgments. Such awards to public interest and legal aid organizations are based on one of the
common underlying premises for all class actions, which is to make access to justice a reality for
people who otherwise would not be able to obtain the protections of the justice system.
Please consider a cy pres award the next time you are in the process of settling a class action suit, or dealing with a residual fund in another appropriate case.
3
Practice Points and Tips
Counsel should always consider whether
eligible residual funds can be made
available for court awards to legal aid,
whether by direct award to one or more of
the organizations identified on page 11, or
through a contribution to the Justice Gap
Fund for the benefit of all of those
organizations.
1. Raise the topic of residual provisions
early
Raising the issue of a class action or other residual
amounts relatively early in settlement negotiations
can have a positive impact on the process. Some
defendants may find the prospect of paying money to
settle a case more palatable when they consider that
some of the money will benefit a good cause.
2. Always consider whether there are
funds that can be made available
Counsel should always consider whether there are
funds that can be made available for court awards to
legal aid. The decision to make a residual award in a
class action most often comes during the settlement
process.
3. Make sure your agreements regarding
cy pres are memorialized in the
settlement agreement or court order
Counsel should make sure that cy pres distribution
agreements are properly memorialized to ensure that
the distribution occurs as a matter of course by the
administrator (see sample wording on pages 12-13).
4. Consider the publicity angle
The driving force for class action residual awards to
legal aid programs is often plaintiffs’ counsel, but
defense counsel also frequently welcome the award
as a way for their clients to resolve a case and obtain
some positive publicity from the settlement.
5. Designate the Justice Gap Fund,
administered by the State Bar of
California, to expand justice
Avoid Conflicts of Interest. The Bar does not
represent parties in Court, virtually eliminating any
conflict of interest for either the Court or the
Defendant.
Benefit a Broad Spectrum of Communities. The
Justice Gap Fund is disbursed to the network of almost
100 legal aid organizations that provide or support civil
legal services without charge to low-income Californians
in all 58 Counties.
Leverage Key Partnerships. Legal aid organizations
leverage resources through creative partnerships with
the courts, government agencies, community
organizations, law schools, law firms, and others, to
expand access to justice.
Fund Quality. The State Bar has decades of
experience as a grant-making organization, working
under the oversight of the Legal Services Trust Fund
Commission.
Join over 21,000 Individuals and Institutions that
Support the Justice Gap Fund. Since 2010, more
than 21,000 lawyers have contributed to the Justice Gap
Fund. Throughout California, some of the largest law
firms participate annually in challenges to encourage
their lawyers to contribute to the Justice Gap Fund.
The State Bar Board of Trustees, the Judicial Council,
local bar associations, Senators Steinberg and Evans, and
Assemblymember Wieckowski have all passed resolutions
declaring October as Campaign for Justice Month.
4
Legal Aid Supports “Justice for All” but Meets Only a Fraction of the Need
No matter where your class action case is, and over a diverse array of subject matters, there is a legal services provider in that California region.
The Legal Services Trust Fund Program of the State Bar administers grants to legal aid organizations in every county in the State. Every population group and geographic region is touched by the services of legal aid providers.
California is fortunate to have almost 100 legal aid organizations to provide quality legal aid to people who otherwise would have nowhere to turn. These programs also leverage the talent and generosity of the private bar in order to provide critical services that benefit poor individuals and nonprofit organizations serving local communities.
Unfortunately, despite best efforts, there remains a profound justice gap. Federal and state funding for legal aid has declined dramatically in recent years. There have also been drastic reductions in IOLTA (Interest on Lawyers’ Trust Accounts) funding as a result of historically low interest rates. The resulting chasm between those who need access to justice, and those who can get it, is called “the justice gap.”
Substitute funding from sources such as residual and cy pres awards can provide a critical foundation in generating funds for legal service programs who rely on our help to achieve fundamental fairness.
In 2007, the Legal Services Corporation (LSC) completed a national comprehensive study of the civil legal needs of low-income Americans and issued a report, Documenting the Justice Gap in America: The Current Unmet Civil Legal Needs of Low-Income Americans. The study found that for the vast majority of low-income Americans, the need for civil legal assistance is not being met by existing programs.
The failure of wages to keep up with inflation, the escalating cost of housing, and the widening income divide between rich and poor, is keeping many basic necessities beyond the reach of many in our state. Many Californians do not have the resources to obtain legal representation for the myriad of problems affecting them every year, such as domestic violence, loss of housing and employment, and discrimination. To exacerbate the problem, other major impediments to access to justice include scarcity of legal services in rural areas, language access issues, and the rapidly increasing rate of poverty.
In California
To be eligible for legal aid, an
individual must earn no more than
$14,000 a year or $30,000 for a family
of four.
More than half of the 8 million
Californians who qualify for federal
legal aid are turned away due to lack
of resources.
There is one legal aid lawyer for every
8,316 Californians who qualify for legal
aid.
5
Examples of Class Action Residual Awards
In California, and across the country, class action residuals have been successfully designated in both Federal and State Court to fund civil legal services for the poor. In 2011, more than $5.3 million in cy pres funds in federal and state court actions were designated to California civil legal aid organizations. There also is a growing history of directing awards to the State Bar of California’s Justice Gap Fund, which incepted in 2008, to fund almost 100 legal aid organizations in California. Cy pres awards to legal aid organizations have been approved by courts in a broad array of contexts. Below are a few examples:
In Lavender v. Skilled Health Care Group, in the Superior Court,
County of Humboldt, a class of 32,000 plaintiffs received a $677
million verdict against the nursing home group for failure to comply
with regulations governing the safety and care of residents in long
term care facilities. Several California legal aid organizations received
cy pres, including one organization that received $1.45 million, which
the judge approved for implementing a four-year statewide Resident
Rights Campaign. A second distribution of $1.2 million to the same
organization resulted in development of a financial abuse prevention
program. Another legal aid organization received $100,000 to support
advocacy and legal education to patients in long term care facilities.
In The American Honda Auto Finance coordinated cases, before the
Superior Court, County of San Diego, the defendants identified
recipients for 50% of the funding, while the class representatives
through counsel Chavez & Gertler and Kemnitzer, Barron & Krieg, LLP
identified 11 recipients, including 9 California legal aid organizations
statewide that each received $104,579.
Smokeless Tobacco Cases I-IV: In 2009, the Superior Court in San
Francisco approved a settlement totaling $96 million, including the
request of plaintiff, represented by Hadsell & Stormer, to distribute cy
pres to 106 charities, including 34 IOLTA-funded legal aid organizations
that together received almost $14 million in cy pres.
In Velez v. Novartis Pharmeceuticals Corp., a federal jury in New York
concluded that defendant pharmaceutical company had discriminated
against its female sales force employees nationwide. After a jury
award of over $250 million, the parties settled the case for $152.2
million, to be distributed among the class of 6,200 women, and an
agreement to change company practices. The judge approved cy pres
distributions totaling $164,000 to seven organizations that focused on
women’s and workers’ rights, including a California State Bar funded
support center.
In California, California Code of Civil Procedure § 384 provides that
residual funds may be designated to the State Bar of California for legal
aid, or directly to any nonprofit organization that provides legal aid.
There is a growing history of lawyers and judges directing cy pres awards
to the State Bar’s “Justice Gap Fund,” which was created by the
legislature in 2008, and is administered by the Legal Services Trust Fund
Program at the State Bar of California. The State Bar has collected over
$1.5 million in cy pres designations to qualified legal aid organizations
that provide legal services to indigent people in every county and across
a range of substantive areas. The State Bar recognizes firms that
designate cy pres funds to legal aid on the Campaign for Justice website
at www.CAforJustice.org.
A CASE STUDY
In Walker v. Westlake Financial
Services, Westlake sent notices of
intent relating to motor vehicle
repossession that did not comply
with California consumer
protection laws. After
distribution to the class
members, funds were distributed
as cy pres. Among the awards,
one legal aid organization
received $135,982, which was
used to support its consumer law
project. That project leverages
the work of pro bono attorneys
to champion the rights of low-
income consumers who need
help to avoid the impact of auto
fraud, home equity scams, home
improvement fraud and identity
theft. Supported by this award,
the local legal aid organization’s
consumer law team of six
attorneys leveraged the power of
more than 300 pro bono
attorneys to provide millions in
free legal services to help
vulnerable consumers.
“People lose their homes, their
cars, and their financial security
every day because they become
victims and don’t have an
attorney to fight for them. Cy
pres awards for legal services
help preserve fairness in our
justice system and protect
consumers.”
Hernán Vera, President/CEO,
Public Counsel, a legal aid
organization in Los Angeles and a
member of the Board of
Trustees, State Bar of California
6
Caselaw and Other Resources
Caselaw on the Appropriateness of Cy pres, including as
a Designation to Further Access to Justice
In re Baby Prods. Antitrust Litig., 708 F.3d 163, 173 (3d Cir. 2012). Good background on cy
pres doctrine generally and rejects broad-based challenges to use of cy pres awards, but
ultimately overturned cy pres award at issue, finding that the settlement provided insufficient
funds to class members;
Dennis v. Kellogg, Co., 697 F.3d 858 (9th Cir. 2012), noting that cy pres distribution to food-
related organizations was inappropriate because it would not benefit class members, and that
distribution to consumer protection organizations would further the concerns embodied by
underlying statutes in the case;
Nachshin v. AOL, LLC, 663 F.3d 1034 at 1036-37 (9th cir.2011) noting that distribution of $2
million to 66 million class members would have entitled each member to approximately three
cents, making distribution to class members cost prohibitive, and that cy pres distribution should
go to an organization that would further the objective of the underlying statutes and benefit the
interests of silent class members;
Hughes v. Kore of Indiana Enterprise, 731, F.3d,672,677, (7th Cir. 2013) pointing out that
“class action litigation, like litigation in general, has a deterrent as well as a compensatory
objective” and thereby approving a cy pres award of $10,000 to a consumer protection charity,
with no payments to class members;
In re Lupron Mktg. & Sales Practices Lit., 677 F.3d 21,33 (1st Cir. 2012), addressing for the
first time the procedural and substantive standards for distribution of funds under the cy pres
doctrine. In determining whether proposed distributions “reasonably approximate” the interests
of the class members, it identified a number of factors, including: the purposes of the
underlying statutes claimed to have been violated; the nature of the injury to the class; the
characteristics and interests of the class members, including their geographical scope; the reason
that settlement funds were unclaimed; and, the closeness of the fit between the class and the cy
pres recipients;
Jones v. Nat’l Distillers, 56 F.Supp.2d 355, 359 (SDNY 1999), citing multiple cases where a
class action cy pres distribution designed to improve access to legal aid was found appropriate;
Glen Ellyn Pharmacy Inc.v. Roche-Posey Inc., 11-968,2012 WL 619595 (N.D. 2012), addressing
unsolicited faxes for sunscreen products, awarded cy pres fund to legal aid organizations, giving
reasons for each award;
In re EasySaver Rewards Litig., 921 F.Supp.2d 1040 (S.D. Cal. 2013), allowing cy pres
distribution to three universities, including a law school, for the creation of internet privacy and
security programs that would benefit internet consumers such as the class members.
7
Articles and Other Resources
Amici Curiae Brief of the National Legal Aid and Defender Association and the Association of
Pro Bono Counsel in Oetting v. Jacobson, PC. (8th Cir., E.D. MO), The brief includes detailed
points and authorities making the case for cy pres distribution to legal aid, including a four-page
table of authorities.
Thomas A. Doyle, Residual Funds in Class Action Settlements: Using ‘Cy pres’ Awards to
Promote Access to Justice, The Federal Lawyer, July 2010, at 26-27, overview of case law and
other authorities that support cy pres distributions to legal aid and access to justice;
Bob Glaves and Meredith McBurney, Cy pres Awards, Legal Aid and Access to Justice: Key
Issues in 2013 and Beyond, MIE Journal, Spring 2013. Includes appendix with wealth of
references to articles and cases about cy pres generally and its application to legal aid
organizations
What Can a Court Do with Leftover Class Action Funds? Almost Anything! The Judges Journal,
summer 1996, p. 20.
Cy Pres Awards in Other Types of Proceedings
Bankruptcy Court:
In re Xpedior Inc., 354 B.R. 201 (N.D. Ill, 2006). $707,000 surplus remaining in bankruptcy case
after all claims were paid was distributed to five charities, including three legal aid entities;
Bankruptcy’s Spare Change, Wall Street Journal, March 11, 2012; Discusses problem of
unclaimed surplus money from Chapter 11 Bankruptcy cases and the client’s efforts to transfer
the money to charity, including legal aid entities.
Rule 2011-1 of Local Rules of U.S. Bankruptcy Court (S.D. Florida). Rule sets forth procedure
for unclaimed funds in bankruptcy cases.
Court-ordered Sanctions:
In 2010, a Cook County (Chicago) Judge ordered one of the parties to pay $1.1 million as a
sanction for violating a previous court ruling to preserve documents in a lawsuit, and used Illinois
cy pres statutes as a model for designating recipients of the funds. A Chicago legal aid
organization received half of the funds.
Cy Pres Funds Awarded to Multiple Entities
(Examples of Methods of Distribution)
Synthroid Mktg. Litig., U.S. District Court for the Northern District of IL, 2011. Cy pres
distribution in a national class action lawsuit regarding pharmaceuticals, with a mix of local and
national legal aid organizations and other organizations receiving a share of the award;
Susan Miller et al. v. Royal Maccabees Life Ins. Co., Circuit Court of Cook County, IL, 2008. Cy
pres distribution in a national class action settlement involving a rate increase on life insurance
policies. Illinois legal aid programs received $1.8 million; another $1.8 million was distributed to
111 Legal Services Corporation-funded programs around the country.
8
Sample Settlement Provisions and Orders
As a general rule, class action settlements should provide for a cy pres distribution of settlement funds when
such funds cannot be distributed to the class. Counsel should negotiate a provision that designates a cy pres
recipient(s). Below are sample provisions.
Sample Settlement Agreement Wording: Unclaimed Funds/Cy pres
The Parties recognize that there likely will be some amount of unclaimed funds after disbursement of the
Settlement Fund for the payment of valid claims, and payment of costs and expenses of administration. The
Parties agree the unclaimed funds resulting from the failure to file claims and from the denial of claims filed
by Class members shall be distributed to Cy pres recipients as set forth hereinafter. The portion of the
Settlement Fund distributed to Cy pres recipients (hereinafter “Recipient”) shall be referred to as
“Recipient’s Share.” The parties have agreed the unclaimed funds available for Cy pres recipients shall be
divided among the following organizations: (Insert Name(s) of Recipient Organizations)
Sample Order: Language for Final Approval Order for Class Action Settlements (Residual Funds)
WHEREAS, on (date), this matter came before the Court for hearing on Plaintiffs’ Unopposed Motion to
Distribute the Cy pres Fund;
WHEREAS, on (date), this Court granted final approval of the $__ Settlement Agreement entered into by Class
Plaintiffs and Defendants in the captioned matter, and at that time overruled all objections to the Settlement
Agreement and found that the plan of allocation (which provides that $__ of the Settlement Fund be
distributed to class members; and that any funds remaining in the Settlement Fund after payment of claims,
attorneys’ fees and costs, taxes, settlement administration costs, and any class plaintiff incentive awards, will
be distributed as cy pres) is fair, reasonable, and adequate;
WHEREAS, as directed by the court, the parties have met and conferred and reviewed applications submitted
by the cy pres candidates, and now provide the Court with a joint recommendation on a plan of distribution
for the Cy pres Fund, and have provided the court with a list of organizations, and a description of the work
performed by each candidate;
The Court having considered all papers filed and proceedings herein,
The Court finds that (names of Legal Services Organization) are eligible organizations and the Court directs
that __% of any Residual Funds from the Settlement shall be distributed to (Legal Services Organizations).
The Court further finds that the Justice Gap Fund held by the State Bar of California is an eligible cy pres
recipient and the Court further directs that __% of any Residual Funds from the Settlement shall be
distributed to the State Bar of California Justice Gap Fund.
These distributions shall be made in a timely manner and in any event no later than calendar days from
the date of this Order without further Order of the Court.
Plaintiff’s Motion to distribute the cy pres Fund as set forth above is hereby GRANTED, and this Court hereby
approves of the cy pres plan of allocation, and finds that it is fair, reasonable and adequate to the class.
Sample Order: Order Releasing Reserved Attorneys’ Fees and Payment of Cy Pres Award
Having read the parties’ Joint Statement, the Declaration of the Settlement Administrator, and considered
these factors as part of the Court’s Ordering of a Final Accounting Hearing, and good cause appearing
therefore, the Court hereby Orders, within 5 days of the date of this Order, the Settlement Administrator to
remit (1) to Class Counsel $___ in attorneys’ fees that was reserved pursuant to the Court’s Order granting final
approval of the settlement; and within 7 days following the date on which all remaining settlement checks
have become void, (2) to the cy pres beneficiary the residual pursuant to the terms of the Settlement
Agreement.
IT IS SO ORDERED.
9
Sample Order: Order Granting Cy Pres Distribution
The parties hereby stipulate as follows:
WHEREAS, the Court granted final approval of the parties settlement on (date);
WHEREAS, on (date), the Court-appointed Claims Administrator ___, printed and mailed ____
Settlement Award Payments totaling $___ and approximately __% of the net settlement fund was
distributed successfully and __% of the settlement checks were cashed, and all reasonable efforts
were taken to locate all class members;
WHEREAS, there was an expected residual from the first distribution of $____ in unreturned taxes
and uncashed checks; and
WHEREAS, on (date), the Court ordered a second distribution of the residual to eligible Class
Members; and
WHEREAS, on (date), (name of class administrator) mailed ____ checks totaling $____ as part of the
second distribution;
WHEREAS, Section __ of the Settlement Agreement provides that any unclaimed funds may be
redistributed to class members or deposited into a Cy Pres Fund; and
WHEREAS, (name of class administrator) has testified that, not counting unreturned taxes, the
residual is currently $_____, and that it is prepared to issue the Cy Pres distribution upon Order of
the Court; and
WHEREAS, the Parties agree that the residual should be distributed at this time to the Cy pres
recipients: (identify recipients), according to the terms of the Settlement Agreement approved by
the Court;
THEREFORE, the Parties stipulate that any residual remaining on the date of this Order shall be
distributed to the Cy Pres beneficiaries according to the terms of the Settlement Agreement within
five (5) Court days of the date of this Order. Further, any additional funds received by the Claims
administrator, whether through the return of taxes, uncashed checks, or for any other reason shall be
distributed in the same manner to the Cy Pres beneficiaries within (5) days of receipt by the Claims
Administrator.
Sample Order in the US District Court, for the Northern District of California
Upon consideration of the parties’ Joint Motion and Order to Create Qualified Settlement Fund, it is
ordered, judged, and decreed that:
The payment set out in paragraph of the Master Release Agreement will be
made to the Settlement Administrator designated in the Master Release Agreements, , and that
the account created by __________ for receipt of these funds will be deemed a Qualified Settlement
Fund in accordance with Section 468B of the United States Internal Revenue Code (26 U.S.C. § 468B)
and the regulations promulgated thereunder (26 C.F.R. § 1.468B-1).
The Settlement Administrator agrees to act strictly in accordance with its obligations as described in
the Master Release Agreement.
The Qualified Settlement Fund created by this Order will be subject to the continuing jurisdiction of
this Court.
Sample Order: Cy Pres Provision Within Order Approving Receiver’s Final Report and Account,
etc.
If the remaining funds in the receivership estate exceed $____ after (date), the Receiver shall
thereafter disburse all remaining funds in a second pro rata distribution to the approved general
unsecured claimants who did in fact cash their checks timely. If the remaining funds in the
Receivership estate are $___ or less on (date), the Receiver shall pay those funds to (identify legal
aid cy pres recipient).
10
Legal Aid Programs in California
The following programs help more than 250,000 of the most vulnerable Californians navigate the legal system each year. Each program is an expert in a specific service area and many collaborate with each other to help create and protect fairness to all. All of these programs, as well as the Justice Gap Fund at The State Bar of California, are appropriate recipients of cy pres funds, permitted by C.C.P. Section 384, or under federal case law. To access links to the websites of each of these organizations, go to http://www.CAforjustice.org/about/organizations.
Affordable Housing Advocates
AIDS Legal Referral Panel
Alameda County Bar Association Volunteer Legal
Services Corporation
Alameda County Homeless Action Center
Alliance for Children’s Rights
Asian Americans Advancing Justice–Asian Law Caucus
Asian Americans Advancing Justice–Los Angeles (fka
Asian Pacific American Legal Center)
Asian Pacific Islander Legal Outreach
Bay Area Legal Aid
Benchmark Institute
Bet Tzedek Legal Services
California Advocates for Nursing Home Reform
California Indian Legal Services
California Rural Legal Assistance Foundation
California Rural Legal Assistance, Inc.
California Women’s Law Center
Casa Cornelia Law Center
Center for Health Care Rights
Center for Human Rights and Constitutional Law
Central California Legal Services
Centro Legal de la Raza
Chapman University School of Law Family Violence
Clinic
Child Care Law Center, Inc.
Children’s Rights Clinic at Whittier Law School
Coalition of California Welfare Rights
Organizations, Inc.
Community Legal Services in East Palo Alto
Contra Costa Senior Legal Services
Disability Rights California
Disability Rights Education and Defense Fund
Disability Rights Legal Center
East Bay Community Law Center
Elder Law & Advocacy
Family Violence Law Center
Greater Bakersfield Legal Assistance, Inc.
Harriett Buhai Center for Family Law
Immigrant Legal Resource Center
Impact Fund
Inland Counties Legal Services
IELLA Legal Aid Project
Inner City Law Center
Insight Center for Community Economic Development
Justice & Diversity Center of the San Francisco Bar
Association
La Raza Centro Legal
Law Foundation of Silicon Valley
Lawyers’ Committee for Civil Rights of the
San Francisco Bay Area
Learning Rights Law Center
Legal Aid Foundation of Los Angeles
Legal Aid Foundation of Santa Barbara County
Legal Aid of Marin
Legal Aid of Napa Valley
Legal Aid of Sonoma County
Legal Aid Society of Orange County
Legal Aid Society of San Bernardino
Legal Aid Society of San Diego, Inc.
Legal Aid Society of San Mateo County
Legal Aid Society-Employment Law Center
Legal Assistance for Seniors
Legal Assistance to the Elderly
Legal Services for Children
Legal Services for Prisoners with Children
Legal Services for Seniors
Legal Services of Northern California
Los Angeles Center for Law and Justice
Los Angeles County Bar Association Projects
McGeorge School of Law Community Legal Services
Mental Health Advocacy Services, Inc.
National Center for Youth Law
National Health Law Program
National Housing Law Project
National Immigration Law Center
National Senior Citizens Law Center
Neighborhood Legal Services of Los Angeles County
Positive Resource Center
Prison Law Office
Pro Bono Project Silicon Valley
Public Advocates, Inc.
Public Counsel
Public Interest Clearinghouse (dba OneJustice)
Public Interest Law Project
Public Law Center
Riverside Legal Aid
San Diego Volunteer Lawyer Program, Inc.
Santa Clara County Asian Law Alliance
Santa Clara University Katherine & George Alexander
Community Law Center
Senior Adults Legal Assistance
Senior Citizens Legal Services
UC Davis School of Law Legal Clinics
USD School of Law Legal Clinics
Voluntary Legal Services Program of Northern
California
Wage Justice
Watsonville Law Center
Western Center on Law & Poverty
Worksafe Inc.
Youth Law Center
Yuba-Sutter Legal Center for Seniors 11
2013-2014 Commissions and Committees
Legal Services Trust Fund Commission
Adrian Dollard, Co-Chair Qatalyst Partners
Donna Hershkowitz, Co-Chair Administrative Office of the Courts
Christina S. Stokholm, Co-Vice Chair Law Offices of Christina Stokholm
Hon. John A. Sutro, Jr. (Ret.), Co-Vice Chair Marin Superior Court
Banafsheh Akhlaghi
Tamara Lynn Beard
Deborah F. Ching Nonprofit Consulting Group
Mark R. Conrad U.S. Attorney’s Office, Northern District of CA Corey N. Friedman California Department of Industrial Relations
Mollie Gomez
Emily Harpster United Way of the Bay Area
Parissh Knox Best Best & Krieger LLP
Richard G. Reinis Steptoe & Johnson, LLP
LaQuita (Mary) Robbins
Susan D. Ryan Riverside Superior Court
Kim Savage Law Office of Kim Savage
Christian Schreiber Chavez & Gertler LLP
Chen Song Nathan Associates, Inc.
Melissa L. White Landau and White Law Offices LLP
Advisory Members
Hon. Michael J. Convey Los Angeles Superior Court
Hon. William J. Murray, Jr. California Court of Appeal, Third Appellate District
Hon. Faye D’Opal Marin Superior Court
State Bar Board of Trustees Liaison
Hernan Vera, CEO Public Counsel
Legal Services Trust Fund Program Campaign for Justice Staff
Stephanie Choy
Elena Enzweiler
Jennifer Kregear
Dan Passamaneck
Access to Justice Commission
Hon. Ronald Robie, Chair California Court of Appeal, Third Appellate District
Joanne E. Caruso, Vice Chair Jacobs Engineering Group Inc.
Mary Lou Aranguren Alameda Superior Court
Hon. Steven K. Austin Contra Costa Superior Court
Marcia R. Bell Director, San Francisco Law Library
Catherine Blakemore Disability Rights California
Kresta Daly Barth Tozer & Daly, LLP
Meera E. Deo Thomas Jefferson School of Law, San Diego
Erika C. Frank California Chamber of Commerce
Hon. Andrew J. Guilford United States District Court, Central District of CA
Hon. James E. Herman Santa Barbara Superior Court
Janis R. Hirohoma
Venus D. Johnson Alameda County District Attorney’s Office
Hon. Mark Juhas Los Angeles Superior Court
Mary E. Kelly CA Unemployment Insurance, Appeals Board
Michael Levy California Energy Commission
Hon. Goodwin Liu Supreme Court of California
Paul S. Marks Neufeld Marks
Hon. Douglas P. Miller Associate Justice, Court of Appeal Fourth Appellate District
Deborah Moss-West Santa Clara University School of Law
Anne Marie Murphy Cotchett, Pitre & McCarthy
Paul Tepper Western Center on Law & Poverty
Edward Thomas Unterman Rustic Canyon Partners
Dian M. Vorters Office of Administrative Hearings State of California
State Bar Board of Trustees Liaisons
Miriam Krinsky The California Endowment, UC Irvine School of Law
Pearl Mann Law Office of Pearl Gondrella Mann
David J. Pasternak Pasternak & Pasternak
Cy pres Committee
Adrian Dollard, Chair Qatalyst Partners
Hon. Aviva Bobb (Ret.) Los Angeles Superior Court
Salena Copeland Legal Aid Association of California
Hon. Terry Friedman (Ret.) Los Angeles Superior Court
Brian Kabateck Kabateck, Brown and Kellner LLP
Hon. James Lambden (Ret.) California Court of Appeal, First Appellate District
Jocelyn Larkin Impact Fund
Hon. Howard Matz (Ret.) United States District Court, Central District of CA
Anne Marie Murphy Cotchett, Pitre & McCarthy
David Pasternak Pasternak & Pasternak
Sandor Samuels Bet Tzedek Legal Services
Christian Schreiber Chavez and Gertler LLP
Campaign For Justice Committee
Hon. Douglas Miller, Co-Chair California Court of Appeal, Fourth Appellate District
James Preis, Co-Chair Mental Health Advocacy Services, Inc.
Catherine Blakemore Disability Rights California
Diego Cartagena Bet Tzedek Legal Services
Salena Copeland Legal Aid Association of California
Tamara Crepet Habeas Corpus Resource Center
Amos Hartston Inner City Law Center
Kira Klatchko Best Best & Krieger
Paul Marks Neufeld Marks & Gralnek
Deborah Moss-West Santa Clara University School of Law
Toby Rothschild Legal Aid Foundation of Los Angeles
For more information about expanding access to justice through class action residuals and other court awards, contact:
Stephanie Choy, Managing Director Legal Services Trust Fund Program State Bar of California 415 538-2249 [email protected]
http://www.Caforjustice.org/about/cypres
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www.CAforJustice.org